Selecting 'Pre-Unicorn' Companies Together with the People

Final Evaluation of Target Companies for the 2nd Preliminary Konunicorn Special Guarantee in 2020

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[Asia Economy Reporter Kim Cheol-hyun] The public will participate in selecting 'pre-unicorns' with high growth potential. The Ministry of SMEs and Startups (Minister Park Young-sun, hereinafter referred to as the Ministry) announced that the final evaluation for the second round of the 2020 'Pre-Unicorn Special Guarantee' companies, selected together with the public, will be conducted on the 9th.

The final evaluation on this day will be conducted with the participation of both the expert judging panel and the public judging panel. The expert evaluation panel consists of 15 investment professionals, including representatives from well-known domestic venture capital firms, and the public judging panel, led by Chairman Jang Byung-gyu of Krafton, includes 60 members. Together, they will thoroughly assess the technological innovation and growth potential into unicorn companies. In particular, due to the government's elevation of social distancing to level 2.5 amid the COVID-19 pandemic, strict adherence to quarantine guidelines such as maintaining a distance of over 2 meters between evaluators will be observed during the evaluation.

The Pre-Unicorn Special Guarantee is one of the core projects of the government's 'K-Unicorn Project' aimed at realizing Korea as one of the four major venture nations. During the second recruitment in September, 43 companies applied, showing continuous industry interest. Among the applicants, 30 candidate companies that passed the first-stage eligibility review, second-stage technical evaluation, guarantee screening, and guarantee screening committee were selected at the end of November, and a face-to-face evaluation for final confirmation will be conducted on this day.

The Pre-Unicorn Special Guarantee started as a pilot project last year, supporting guarantees totaling 163.2 billion KRW for 27 companies. From this year, it has been promoted as a regular project, selecting 15 companies in the first round and supporting guarantees totaling 94 billion KRW. Results are also emerging. Last year, the 27 selected companies showed a clear growth trend with a 53% increase in sales and an increase of 29 employees despite operating losses, thanks to the special guarantee, and attracted follow-up investments of 375.4 billion KRW. This year, the 15 companies selected in the first round have an average sales revenue of 24 billion KRW, 111 employees, investment attraction amount of 29.8 billion KRW, and a corporate value of 119.4 billion KRW, indicating many companies with high potential to grow into unicorns.

Looking at the 30 companies subject to the final selection evaluation by industry, most are 4th Industrial Revolution companies leading innovative growth in fields such as artificial intelligence (AI) and bio-health (56.7%), and non-face-to-face ventures and startups (66.7%). By detailed sector, artificial intelligence (23.3%, 7 companies), data (13.3%, 4 companies), network (6.7%, 2 companies), bio-health (6.7%, 2 companies), and system semiconductors (6.7%, 2 companies) were in order. Among the non-face-to-face sectors, lifestyle consumption such as customer consultation apps (16.8%), smart business and finance such as small business management solutions (13.3%), entertainment such as animation (13.3%), and foundational technologies such as system semiconductors (13.3%) were ranked.

The average investment amount for the 30 companies in the final selection evaluation was 19.7 billion KRW, with the largest group being companies that have attracted venture investments between 10 billion and less than 15 billion KRW and have entered the scale-up stage (11 companies, 36.6%), and there were also 8 companies exceeding 20 billion KRW. Additionally, 77% of the companies had a BBB or higher rating in the Korea Technology Finance Corporation's technology and business evaluation, indicating that most are excellent technology-holding companies with technological capability and growth potential.

Cha Jeong-hoon, Director of the Startup Venture Innovation Office at the Ministry of SMEs and Startups, said, "It was difficult to distinguish superiority as 36.7% of the promising pre-unicorn companies with a corporate value of over 100 billion KRW were added to this year's application criteria," and added, "Based on the strict evaluation results of the expert panel and the public judging panel, we plan to select companies with high potential to grow into future unicorns in December."

This content was produced with the assistance of AI translation services.